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Is Yeltsin Moving In For The Knockout?

June 06, 1993

International Outlook

IS YELTSIN MOVING IN FOR THE KNOCKOUT?

Fresh from his victory in Russia's April referendum, President Boris Yeltsin is cranking up his second spring offensive: a campaign for a new constitution. Yeltsin wants to create a strong presidential republic with a bicameral legislature--and soon. He is eager to replace the Soviet-era parliament, which so far has blocked much of his reform program. To advance his plan, Yeltsin is calling for a constitutional convention in Moscow on June 5.

Yeltsin stands a good chance of pulling off this new coup. The Russian President clearly has been strengthened by the referendum, which gave him a 58% plurality. Since then, Yeltsin has assumed a much bolder posture. He has openly defied Russian nationalist opponents by siding with the West against the Serbs over Bosnia.

At home, Yeltsin also is displaying more vigor. His economic-reform team recently extracted a pledge from central bank chief Viktor Gerashchenko to slash credits to state companies, even though it may cost jobs. The breakthrough deal, which aims to cut inflation to 10% per month from 20% today, will open the way for a $3 billion loan from the International Monetary Fund. Yeltsin also has been giving privatization a needed push by speeding auctions of state companies. He has even ordered the dismissal of foot-dragging factory managers.

SWEETENERS. Meanwhile, parliament seems to be bending under the pressure of Yeltsin's April victory. Although the legislative body is pushing its own version of a new constitution, some conservative deputies are beginning to side with Yeltsin against his chief antagonist, Chairman Ruslan I. Khasbulatov.

To win, Yeltsin will have to take his case to Russia's increasingly restive regions. Far from homogeneous, Russia is a pastiche of 88 regions, including 21 ethnic republics. They have been asking for greater autonomy, a bigger share of tax revenues, and more control of their oil and other resources. The convention could easily bog down in the sticky issues of regional rights.

The draft document Yeltsin's team has drawn up attempts to address these issues. It provides for a bicameral Federal Assembly that includes one body akin to the U.S. Senate, with equal representation from each region. But the regions want more. The trick will be giving them more power and a bigger share of the tax revenues without undermining Russia's unity or busting the federal budget.

PROFIT RIGHTS. Still, analysts expect the convention to produce a democratic, promarket constitution that could be ratified this summer. Once passed, it should give a boost to foreign investment. In addition to a long list of human rights, the Yeltsin draft specifically guarantees the right to private property, including land, and the free movement of labor and goods. As it stands now, the draft even bans new laws that prevent taxpayers from making a normal profit. "It gives a legal guarantee for Western capital," says Viktor Mushinski, a Russian law professor. "The values spelled out are Western values."

The constitutional plan gives Yeltsin sweeping powers, including the right to dissolve parliament under certain circumstances. It also removes the central bank from legislative control by letting the President appoint its chief.

But ratification won't be easy. One problem is that, technically, only the existing parliament can approve a new constitution. So Yeltsin is mulling strategies. He may appeal to voters in yet another referendum. Or he may ask the constitutional convention to adopt a new mechanism for approval. If his maneuvers pay off, Russia could wind up with a more effective government by the first snowfall.EDITED BY STANLEY REED Deborah Stead in Moscow